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Federal regulators on Monday made permanent regulation of SEC naked short selling ban, put in at the height of last short selling ban restriction. The Securities and Exchange Commission announced that it took the action on the rule targeting of naked short selling. Meanwhile, Short-sellers bet against a stock. They generally borrow a company’s shares, sell them, and then buy them when the stock falls and return them to the lender.

SEC naked short selling occurs when sellers don’t even borrow the shares before selling them, and then look to cover positions sometime after the sale. The SEC rule includes a requirement that brokers must promptly buy or borrow securities to deliver on a short sale and consider several new approaches to reining in rushes of regular short-selling.
Investors and lawmakers have been clamoring for the SEC to put new brakes on trading moves they say worsened the market’s downturn starting last fall. SEC Chairman Mary Schapiro has said she is making the issue a priority.

In addition to making the permanent regulation of SEC naked short selling restriction, the SEC and its staff are working with major stock exchanges to make data on short-sale transactions and volumes publicly available through the exchanges. It will result in substantial increase.

The regulation of SEC naked short selling ban and restriction were announced the same day a new advisory committee, established to advise the SEC on regulatory issues, financial disclosure, trading fees and other matters, held its first public meeting at the agency’s Washington headquarters.

Source: short-selling ban now permanent

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